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| Author: | Greve, H.R. |
| Title: | Multimarket contact and sales growth: Evidence from insurance |
| Journal: | Strategic Management Journal
2008 : MAR, VOL. 29:3, p. 229-249 |
| Index terms: | strategic planning market share insurance financial performance growth Norway |
| Language: | eng |
| Abstract: | In this study, predictions are developed to explain how mutual forbearance (here as: m-f.) occurs, but sometimes fails, in markets with imperfect observability. M-f. means that firms do not aim to take market share from each other through price cuts or non-price competition, and hence, sales are growing at uniform rates. With firms defecting from m-f., they have higher sales growth, if the potential rewards are high and the chance of being detected is low. This theory is tested on a panel of firms operating in the Norwegian general insurance industry. It is found that sales growth is most rapid in firms not meeting many multimarket competitors and firms that are economically troubled. Highly concentrated or growing markets have higher heterogeneity of growth rates. |
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